South African bank launches loyalty scheme
South Africa's Old Mutual Bank has launched a new credit and debit card-based loyalty programme called 'Old Mutual Greenbacks', which rewards consumers with points for making payments using the bank's credit and debit cards.
Cardholders earn 1 Greenback for every R5.00 (approx. US$0.75) of eligible spend made using their Old Mutual Bank credit or debit card, with their points balance being updated on a monthly basis. Quarterly statements are mailed out to all members.
Earning points Greenbacks don't expire, except if the customer fails to transact using the card for five months or more, or if their account is in arrears for three months or more. Exceptions to point-earning spend include cash withdrawals, casino chip purchases, finance and other card charges, fees or taxes levied by Old Mutual Bank or the government.
Additional points can be purchased in blocks of 1,000 (for R75 per block - approx. US$11.70) to help cardmembers achieve the redemption level for the reward of their choice. Points can also be transferred to other Greenbacks accounts - for example, those of family or friends - to pool resources toward a bigger reward.
Redemption options Redemptions are managed offline, with consumers needing to call a redemptions hotline (or send a fax to a redemption team) with their request. Members can use their Greenbacks for a range of rewards such as:· Free flights (with SAA or regional airline Kulula.com);· Weekends away (with Protea Hotels or Southern Sun);· Shopping vouchers (for various malls) or a case of wine;· Car hire (with Avis);· Donations to any of 200 charities (via Greater Good SA);· Payment toward bank and credit card fees (up to R100 per month).
The shopping vouchers are good for movie tickets, CDs, restaurant meals, fashion clothing and jewellery at a selection of malls across the country. For some of the participating malls, the vouchers are sent to the customer's mobile phone in the form of a text message (SMS). The SMS voucher malls include: Cavendish Square, Gateway Theatre Of Shopping, Menlyn Park, The Zone @ Rosebank, Riverside Mall, Vincent Park, Mutual Village, Johannesburg Airport, Cape Town Airport, and Durban Airport.
Other malls accept traditional printed vouchers, which are sent to the customer's nearest Old Mutual Bank branch for collection in person. Those malls include: Alberton City, Eastgate, Sandton City, Midlands Mall, Greenacres, Liberty Promenade.
The maths behind the rewards In terms of the spending required to earn rewards, a R100.00 (approx. US$15.50) shopping voucher can be obtained in exchange for 2,500 Greenbacks. A quick calculation, with top-up Greenbacks being purchased at R0.075 each (bought in blocks of 1,000), shows that programme members would be exchanging R187.50 for each R100.00 shopping voucher - a loss to the consumer of 46.6%.
However, if points are earned through standard credit or debit card spending, the consumer will have spent R12,500 to earn the 2,500 Greenbacks needed for the same R100.00 shopping voucher. This equates to a practical reward rate of 0.8% of spend, which compares favourably with the standard cash-back rewards of between 0.5% and 1.0% offered by many other credit cards worldwide.
Membership fee Customers pay an annual membership fee of R160.00 to participate in the Greenbacks programme, although they can link up to ten Old Mutual Bank credit and debit cards to their Greenbacks account to help speed up the points-earning process.